Alberta report disputes missing royalty billions

CALGARY, Alberta (Reuters) - An Alberta government report
recommends a series of improvements to the oil rich-province's
royalty system but said it found no evidence it failed to
collect billions of dollars in previous years.

Former Auditor General Peter Valentine, who authored the
report, said on Monday the system for collecting economic rent
from the oil and gas industry is "generally well-designed, if
not always well-executed."

Valentine made 13 recommendations to bolster the
accountability, processes and transparency of Alberta's royalty
system, which gained worldwide energy-industry attention last
autumn when Premier Ed Stelmach said his government would hike
rates by as much as 20 percent a year.

That raised the ire of oil companies, many of which
threatened to drastically chop spending in the province, which
has the largest oil reserves outside the Middle East, in favor
of more business-friendly jurisdictions .

Last year, reports by Stelmach's royalty review committee
and the province's current auditor general, Fred Dunn, said the
system failed to keep pace with rising commodity prices so
billions of dollars were potentially left uncollected.

In his report last October, Dunn sharply criticized the
government, charging it sat on reports by the Energy Ministry's
own staff that concluded there was room to raise the economic
rent paid by the industry while staying competitive as a place
to invest.

He said the department did not follow the principles of
transparency and accountability by providing analysis to
support its stewardship of the royalty system.

But Valentine said Alberta has the appropriate controls and
processes to support the goal of optimizing revenues.

"I could find no substance to support the claims made over
the last year that over a billion dollars of royalties were not
collected," he wrote in his report, entitled "Building
Confidence."
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